Nationwide Small Retail Vacancy Rate Rises from 5.3% to 6.2%
Mid-to-Large Retail Rent Falls 0.47% in One Year
[Asia Economy Reporter Moon Jiwon] At the end of last year, as the economy slowed down, the vacancy rates of commercial spaces increased and rental prices fell.
According to the "2019 Q4 and Annual Commercial Real Estate Rental Trend Survey Results" released by the Korea Appraisal Board on the 29th, the vacancy rate of medium to large-sized commercial spaces nationwide rose from 11.3% in Q1 last year to 11.7% in Q4. The vacancy rate of small-sized commercial spaces also increased from 5.3% to 6.2%. The vacancy rate refers to the proportion of the total commercial space area that is unoccupied and not in operation.
In Seoul, the vacancy rate of medium to large-sized commercial spaces was 8.0% in Q4 last year, up 0.5 percentage points compared to Q1. The vacancy rate of small to medium-sized commercial spaces also rose by 1.0 percentage point to 3.9%.
During the same period, rental prices for commercial spaces mostly declined. Nationwide, the rental price for medium to large-sized commercial spaces fell by 0.47% compared to Q4 2018, recording 28,000 KRW per square meter.
The rental price for small-sized commercial spaces was 20,300 KRW per square meter, and for collective commercial spaces, 28,200 KRW, down 0.73% and 0.63% respectively compared to the end of the previous year.
In Seoul, the rental price for medium to large-sized commercial spaces rose by 0.27% year-on-year to 58,200 KRW per square meter, but small-sized commercial spaces (54,700 KRW) and collective commercial spaces (52,200 KRW) fell by 0.16% and 0.07%, respectively.
The Korea Appraisal Board analyzed, "It appears that the commercial districts have weakened due to economic sluggishness in some areas and a decrease in tenant demand."
The vacancy rate of office buildings nationwide was recorded at an average of 11.5% in Q4 last year. This is 0.9 percentage points lower compared to Q1 last year. The vacancy rate of office buildings in Seoul averaged 9.1%, down 1.9 percentage points from early last year.
The Korea Appraisal Board explained, "Although new office supply decreased last year, vacancy rates declined due to rent-free periods and increased demand for shared offices."
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